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April 11, 2011
Vikings stadium bill: Who pays what?
The long-awaited Minnesota Vikings stadium bill was introduced in the Minnesota state senate later Friday afternoon, only three months after lead sponsor Julie Rosen had initially promised it. The legislation would fund a $900 million roofed stadium with a remarkable mishmash of funding streams. Let's review:
- State of Minnesota, $300 million: The money would be cobbled together via what Rosen and her co-sponsors call "user fees," but which actually include a variety of taxes and other revenues, some of which wouldn't hit the Vikings or their ticket buyers at all: a tax on pro sports memorabilia, a Vikings-themed lottery, a new sales tax on satellite TV, and the kickback of property taxes to the stadium — that's right, a TIF. The three items that could be considered an actual hit on the Vikings: an income tax surcharge on players (which would actually hit players, obviously, but could effectively tax the Vikings if they have to overpay free agents to compensate), a new state tax on luxury boxes, and stadium naming rights proceeds. The Minneapolis Star Tribune notes drily that these are "all moves that may draw opposition from the team and the National Football League" — no kidding, given that luxury box and naming rights revenues, in particular, are generally considered by the league to belong to the team owners, even if the stadium itself and its boxes actually belong to the public, as would be the case in Minnesota.
- "Local partner," $300 million: This would be some Minnesota city or county, though none has volunteered thus far to come up with this kind of money. The lucky winner would be allowed to raise sales taxes by 0.5%, raise taxes on hotels, alcohol, food, and beverages by 3%, and charge an admission tax of up to $1 to per ticket — another item that would hit the Vikings in the pocketbook — all without going to a public referendum, as is usually required for local tax increases.
- Vikings owners, $300 million: The Wilfs would actually be required to put in $1 for every $2 of public money, meaning if the price tag went up, they'd have to pay one-third of the cost overruns as well. That's about $70 million more than the team owners said last year that they'd be willing to pay. Also, the Vikings would be required to open their books to a new state stadium authority, and give up those naming rights.
Quote of the day on all this is from co-sponsor Sen. John Harrington, who insisted: "It's very simple. This is a jobs bill. It's between $700 and $900 million in jobs." Except, of course, that a typical stadium project generates about one full-time equivalent job for every $250,000 in expense, while a decent job-creation program costs more like $25,000 per job or less. So a more accurate assessment would have been "it's $90 million in jobs, at a cost of $600 million in taxpayer dollars" — but somehow that probably wouldn't have the same rhetorical impact.
I think your first point depends on how you define a "user" of the stadium. You could argue that it is strictly the Vikings and the people watching the game in the stadium, but when the alternative to building a stadium is the relocation of the franchise; users can be defined as Minnesotans who follow the team and would no longer follow the team in another city. With the majority of Vikings fans in Minnesota never attending a game, there needs to be a way to tax those "users" who are benefiting. Since there is not an efficient way to tax people who watch the games on television, local governments turn to merchandise sales as a way to tax fans that benefit from having a local team to root for. Hopefully, the people who buy merchandise and Vikings branded lottery tickets are the same people who benefit from having the Vikings in Minnesota. I don�t have a problem with the designation of �user tax� or at least the motivation behind it.
Posted by Jim on April 11, 2011 05:59 PM
Somehow I doubt when most Minnesotans hear "user tax" they think "tax that hits everyone in the state, since we all benefit from the Vikings." I think that's what they'd just call a "tax."
Posted by Neil deMause on April 11, 2011 07:53 PM
Zygi Wilf is among the poorest owner in the NFL (net worth: $310 million). He borrowed $175 million to purchase the Vikings six years ago and still has debt ($135 million) - paid down only $40 million of the initial amount. I don't even know what to say. Open the book. Sell the franchise to someone with a deep pocket.
Posted by Sam on April 12, 2011 03:55 AM
I would like to clear up two misconceptions.
#1 The state and local government are NOT responsible for any of the overruns. The owner's contribution is $1 for every $2 at a minimum. This provision acts as a floor to the amount of the team's contribution, NOT a ceiling as you imply.
Here is a link to a summary of the bill prepared by the office of research:
prod.static.vikings.clubs.nfl.com/assets/docs/2011-stadium-proposal-summary.pdf
I would like to direct your attention to the bottom of page 2. "The team must pay at least $1 for every $2 paid by state or local sources - the state and local shares are capped and the team is responsible for cost overruns"
#2. I never said all Minnesotans were users of the stadium, I said all fans in Minnesota are. I was arguing that the legislators had to correct motivation by trying to tax the users. Of the revenue sources you cite as not impacting the user, I think that the following do.
� a tax on pro sports memorabilia (Fans who purchase league licensed merchandise i.e. the fans),
� a Vikings-themed lottery (this is an optional purchase for those who like Viking themed games)
� a new sales tax on satellite TV (an attempt to tax the users who watch the NFL)
These are far less regressive than a general sales tax and would not impact ALL Minnesotans.
1) Thanks for the clarification — I went by what the Strib said, and clearly they got it wrong.
2) I'll give you sports memorabilia, but a Vikings-themed lottery cannibalizes other lottery sales (this is precisely what happened in Maryland with the Orioles and Ravens lotteries to fund those stadiums), and plenty of people have satellite TV who don't watch the NFL. Less regressive than a sales tax, yes, but then, a countywide sales tax hike would still likely be on the table.
Posted by Neil deMause on April 12, 2011 10:29 AM
The sports memorabilia tax would apply to all professional sports in Minnesota, not just for Vikings gear. Buy a Timberwolves jersey? You get taxed for the stadium. Twins bobble-head? That goes to the stadium as well. Even the sports memorabilia tax will affect people who don't care about the Vikings.
Posted by Geoff on April 13, 2011 12:49 PM
"Zygi Wilf is among the poorest owner in the NFL (net worth: $310 million). He borrowed $175 million to purchase the Vikings six years ago and still has debt ($135 million) - paid down only $40 million of the initial amount. I don't even know what to say. Open the book. Sell the franchise to someone with a deep pocket."
That's his problem. So, if I buy something I can't afford, people will help me pay "it off?"
Posted by Wade on April 14, 2011 03:48 PM
Mall of America's Naming Rights could go as high as $1 Billion when tied to the MOA Phase II and the state owning them could use those funds with Zygi Wilf's to pay for the whole thing. MOA would bring in 15 million new tourists a year for 12,000 jobs with an economi impact of $100 Billion over 25 yrs and $300 Million a year in Tax Revenues plus a nice easy place to get to and where two sports facilities have been and that's the ... www.vikingbuzz.com
Posted by vikingbuzz on April 16, 2011 09:28 PM
Mall of America's Naming Rights could go as high as $1 Billion when tied to the MOA Phase II and the state owning them could use those funds with Zygi Wilf's to pay for the whole thing. MOA would bring in 15 million new tourists a year for 12,000 jobs with an economi impact of $100 Billion over 25 yrs and $300 Million a year in Tax Revenues plus a nice easy place to get to and where two sports facilities have been and that's the ... www.vikingbuzz.com
Posted by vikingbuzz on April 16, 2011 09:29 PM
Why on earth would the Mall of America's owners want to give their naming-rights money to the Vikings? It's not like having the Vikings next door would significantly increase their foot traffic, not when the mall gets 40 million visitors a year and the Vikings get 500,000.
Posted by Neil deMause on April 16, 2011 10:02 PM
It is amazing to watch millionaires and billionaires collaborate with ELECTED officials and get away with this highway robbery, again and again and again.
Posted by Dan on May 11, 2011 01:04 AM
A few points i would like to make. First of all, i am a big football fan, but won't let that cloud my judgement. Can anyone point out where the government give public money to a PRIVATELY owned company to buy or build a building. If i am not mistaking, this only happens with sports teams. Like i said, i am a huge football fan, but why should someone who isn't have to pay for something they would never use or benefit from. Why doesn't the team sell stock or issue bonds giving people who want to be involved to do so. I beleive the points made above are very legitimate, but there is one topic that trumps the one above. How can we even think about spending money right now with the billions in the hole that the state is saying we are. So why are we even talking about spending hundreds of millions when we can't even pay all of our bills right now. That is the equivalent of a person who owns a home, but can't make the house payment but is making plans to spend $20,000 to $30,000 on a home entertainment system to go inside. If your neighbor was in that situation, what would you be saying about that person. So why is this any different. Now is not the time to be talking about spending that kind of money, especially when we have a stadium that does the job just fine.
Posted by joel on May 17, 2011 08:56 AM